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help dtudying 4. (17 points) Jordan Enterprises needs someone to supply them with 70,000 cartons of machine screws per year to support their manufacturing needs
help dtudying
4. (17 points) Jordan Enterprises needs someone to supply them with 70,000 cartons of machine screws per year to support their manufacturing needs over the next three years, and you have decided to bid on the contract. The project will require an initial investment of $360,000 in the necessary equipment to start the production. You will use straight line depreciation to zero over the project's life. You estimate that the equipment can be sold for $50,000 at the end of the project's life. Your fixed production costs (not including depreciation) will be $100,000 per year, and your variable production costs should be $5.75 per carton. If your tax rate is 35 percent and you require a 15 percent return on your investment, what bid price per carton will you submit? Show your calculations Step by Step Solution
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